Hanesbrands Inc.

Reported Q2 sales increased 2% year over year to $991 million. EPS rose 60% to $0.24, gross margin increased 145 basis points to 41.2%, and operating margin expanded 255 basis points to 15.5%; SG&A decreased 2% and leveraged 110 basis points. Operating cash flow was $36 million and net debt to adjusted EBITDA leverage was 3.3x, down 1.3x from last year. For Q3, management expects sales of approximately $900 million, operating profit of approximately $122 million, and EPS of approximately $0.16. For full-year 2025, guidance was raised to sales of approximately $3.53 billion, operating profit of approximately $485 million, and EPS of approximately $0.66.

Steve Bratspies framed Hanesbrands as a “new company” that is healthier, more focused, and more profitable, with stronger brands and a more efficient supply chain. He emphasized growth initiatives like Hanes Moves, expansion in loungewear and scrubs, and brand investment levels more than double four years ago. His tone was confident and increasingly optimistic, pointing to improving POS trends in June and July and saying the company has multiple ways to drive shareholder returns through sales growth, margin expansion, and debt reduction.

Scott Lewis highlighted that the quarter beat expectations across sales, gross margin, operating profit, and EPS, with the benefits coming from cost savings, productivity, and lower interest expense. He cited Q2 operating cash flow of $36 million and leverage of 3.3x net debt to adjusted EBITDA, which is 1.3x lower than last year and nearing the company’s 2x to 3x target range. He also said the company expects full-year gross margin to be up 55 basis points and that the outlook assumes a conservative view of the muted consumer environment while reflecting known tariff exposure today.

Analysts focused on what drove the quarter’s outperformance, the timing and size of tariff impacts, pricing pushback in mass, international profitability, and weakness in intimates. Management said margins improved because cost savings, productivity, and lower interest expense scaled faster than expected, and that Q4 is when tariff costs should begin to show up because of inventory flow-through. On pricing, Bratspies said Hanesbrands has not taken price in a few years but is confident it can do so selectively, supported by brand strength and innovation; on intimates, he said the issue is concentrated in Maidenform and that the company is shifting to a broader T-shirt bra strategy.